A.F.). “
“It is generally assumed that an increase in financial incentive provided for work will result in greater performance (Lazear, 2000). The reasoning behind this idea is that larger incentives increase a worker’s motivation, which, in turn, elicits improved behavioral output and performance. However, recent behavioral experiments suggest a more idiosyncratic interplay between incentives and performance (Ariely et al., 2009): when executing skilled tasks, individuals’ performance increases as the level of incentive increases Androgen Receptor assay only up to a point, after which greater incentives become detrimental to performance.

Despite the ubiquity of performance-based incentive schemes in the workforce, the neural and psychological underpinnings of the relationship between incentives and performance are not well understood. Although the relationship between financial incentives and performance has received limited investigation, the paradoxical relationship between arousal and performance has long been reported in the psychological literature (Baumeister, 1984, Martens and Landers, 1970, Wood and Hokanson, 1965 and Yerkes and Dodson, 1908). Keeping in mind that arousal is closely associated Tyrosine Kinase Inhibitor high throughput screening with motivation, behavioral economics has borrowed theories from psychology to explain incentive based decrements (Ariely et al., 2009 and Camerer et al., 2005).

These psychological theories attempt to provide explanations as to why external stressors such as presence of an audience or social stereotypes might have detrimental effects on behavioral performance—commonly termed “choking under pressure” (Baumeister, 1984 and Beilock et al., 2004). A number of theories have been proposed to account for the choking phenomenon, including distraction theories and explicit monitoring theories.

Distraction theories propose that pressure creates a distracting environment that shifts attentional focus to task-irrelevant cues, such as worries about the situation and TCL its consequences (Beilock and Carr, 2001, Lewis and Linder, 1997 and Wine, 1971). In contrast, explicit monitoring theories suggest that the presence of a stressor acts to wrest control of behavior from a habit-based instrumental system involved in the implementation of skilled motor acts, to a more goal-directed instrumental system in which actions must be selected in a deliberative manner (requiring on-going monitoring of performance) (Baumeister, 1984, Beilock and Carr, 2001, Beilock et al., 2004 and Langer and Imber, 1979). At the neural level, very little is known about the mechanisms underpinning performance decrements in stressful environments. Mobbs et al. (2009) found that the degree of subjects’ midbrain activation during a challenging task was correlated with their performance decrement for large incentives. They interpreted this neural response as an “over-motivation” signal for the high rewards associated with successful task performance.